The Garmian Block includes the Sarqala discovery containing an estimated 13 million barrels of proved plus probable (“2P”) oil Reserves and unrisked P50 Prospective oil Resources of 66 million barrels (both Gross Block) as evaluated and audited by Sproule International Limited. WesternZagros has established production from the Sarqala-1 well and made an additional discovery at the Mil Qasim-1 well. The Sarqala discovery previously produced more than 1 million barrels during a nine-month extended well test in 2011/2012 and approximately 2.7 million barrels at the end of 2015. The Company declared commerciality of the Sarqala discovery on December 23, 2013, which signaled the start of the development period for the Garmian Production Sharing Contract.
The Garmian FDP was submitted to the KRG on June 19, 2014. Light oil production and sales commenced at the Sarqala-1 well on February 11, 2015.
Operatorship of the Garmian Block transitioned from WesternZagros to Gazprom Neft, pursuant to the PSC, effective February 29, 2016.
WesternZagros and its co-venturer, Gazprom Neft received approval for the Garmian FDP for the Sarqala Field from the KRG on May 26, 2016.
The Garmian facilities project is focused on the development of the Jeribe / Upper Dhiban reservoir. The Garmian Block Prospective Resources estimates represent undiscovered potentially recoverable volumes on the Sarqala structure within the Garmian PSC that are located:
The first phase of development includes the continuation of production from the Sarqala-1 well, and the drilling of two additional development wells to increase production and to convert prospective resources into reserves.
The Sarqala-2 well is anticipated to spud in the first half of 2017 and is planned to target a fractured portion of the reservoir identified on the 3D seismic. The Sarqala-3 well is planned to follow with similar objectives. Subsequent development phases are contingent upon the Phase 1 well results which should determine the degree that the reservoir is filled to the depth of the structural spill-point. Thereafter, the PSC co-venturers may embark on an expansion of the existing facilities, the construction and installation of an expanded loading terminal and undertake sufficient additional development drilling as deemed necessary to increase production to an estimated 25,000 bbl/d.